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Impurities and defects in Kondo insulators can have an unusual impact ondynamics that blends with effects of intrinsic electron correlations. Suchcrystal imperfections are difficult to avoid, and their consequences areincompletely understood. Here we study magnetic impurities in Kondo insulatorsvia perturbation theory of the s-d Kondo impurity model adapted to smallbandgap insulators. The calculated magnetization and specific heat agree withrecent thermodynamic measurements in samarium hexaboride (SmB$_6$). Thisqualitative agreement supports the physical picture of multi-channel Kondoscreening of local moments by electrons and holes involving both intrinsic andimpurity bands. Specific heat is thermally activated in zero field by Kondoscreening through sub-gap impurity bands and exhibits a characteristic upturnas the temperature is decreased. In contrast, magnetization obtains a dominantquantum correction from partial screening by virtual particle-hole pairs inintrinsic bands. We point out that magnetic impurities could impact de Haas-vanAlphen quantum oscillations in SmB$_6$, through the effects of Landauquantization in intrinsic bands on the Kondo screening of impurity moments.

Magnetic impurities in Kondo insulators: An application to samarium hexaboride